The courts used to take a liberal approach to copyright infringement. But the recent L'Oreal case has changed all that, says Alex Beckett
Imitation may be the sincerest form of flattery but it's seldom appreciated in the cut-throat world of fmcg.
Diageo was sufficiently unimpressed by Sainsbury's launch in April of Pitchers, an alcoholic gin-based drink designed to be drunk with lemonade and fruit, that it has taken legal action against the retailer, claiming infringement of its intellectual property rights for Pimm's.
The issue of look-a-like own-label brands has long been a thorny one for the food industry. Historically, the courts have tended to adopt a fairly liberal stance towards intellectual copyright infringement. But a recent ruling in the non-grocery world of perfume signals a change in stance that will give Diageo cause for optimism and potentially prompt a host of other copycat copyright infringement claims from big brands.
Three years ago, L'Oréal sued Belgian replica perfume maker Bellure for trademark infringement over its Anais Anais fragrance. The case was eventually referred to the European Court of Justice by the UK Court of Appeal in late 2007 for clarification on the interpretation of European directives covering trademarks. This June, the ECJ finally ruled in favour of L'Oréal and in the process changed the parameters of trademark infringement.
It was a landmark moment, according to director of the British Brands Group, John Noble. The last time a manufacturer successfully sued a retailer was in 1996 when the High Court ruled that Asda's Puffin chocolate bar was "deceptively similar" to United Biscuits' Penguin brand.
"Courts have previously bent over backwards to allow everyone a fair crack of the whip," says Noble. "Prior to the L'Oréal ruling in June, brand owners with famous trade marks had to prove imitators had taken unfair advantage by showing that consumers had been affected and that damage or loss of sales had been suffered by the original brand proprietor."
Now, as a result of the L'Oréal case, all courts need to show is that the imitator has benefited from the power of the mark without paying for it. The L'Oréal judgement didn't represent a change in the law, but a change in the interpretation of it, says Cerryg Jones, intellectual property partner at Wragge & Co.
It probably inspired Diageo to take legal action, he says, predicting that other brands will follow suit if Diageo wins. "Very often, high-profile disputes like Diageo's are dealt with behind the scenes," he says. "It's not surprising that, so soon after the ECJ's announcement, someone is suing a retailer for a copycat version. People will be watching the Diageo versus Sainsbury's case very closely. Potentially, over the next year, there could be a slew of similar claims and it won't be restricted to any particular sector."
It is now for the UK Court of Appeal to interpret the ECJ guidance and deliver a final verdict on the L'Oréal Bellure case, which it is expected to do on 1 March 2010.
In addition to keeping the courts busy, the Diageo case could prompt a change in the way brand owners design their products. The more recognisable and unique your original brand is, the easier it is to prove that an own-label brand has copied it, says Leigh Ellis, intellectual property partner at Gillhams Solicitors.
"Brands will simply take more care to ensure that their packaging is distinctive rather than similar, such as the case here. Let's not forget, manufacturers of own-label versions are free to choose whatever packaging design they wish."
Having two heavyweight players such as Diageo and Sainsbury's makes for "a really good dispute", Ellis adds with relish. "In my opinion, Sainsbury's will have difficulties defending its position. It appears as though Pitchers looks to ride off the coat tails of Pimm's."
There is one consolation for Sainsbury's though. Such cases invariably rumble along slowly way past Pimm's o'clock.